EMERGING MARKETS-LatAm assets stung by U.S.-China trade dispute

(Updates prices from region, adds details from Mexico)
SAO PAULO, July 11 (Reuters) – The Brazilian real slid more
than 2 percent on Wednesday, paring solid gains from Tuesday,
as traders in Latin America grew more risk-averse following a
fresh escalation of the trade conflict between the United States
and China.
Latin American equities and currencies, as in other emerging
markets, have been extremely sensitive to the trade spat between
the two superpowers, with traders selling off amid escalations
and buying back during periods of relative geopolitical calm.
On Tuesday, the real climbed 1.84 percent while the
Mexican peso jumped 1.
53 percent to a two-month high as
traders took heart from signals that U.S.
-China tensions have
yet to affect global growth.
But late on Tuesday, the Trump administration said it would
slap 10 percent tariffs on another $200 billion worth of Chinese
imports, releasing a list of thousands of affected products,
ranging from tobacco to coal.
That prompted China to warn it
would strike back, with China’s commerce ministry saying it was
“shocked” by the U.S.
measures.
Brazil’s currency closed down 2.
2 percent against the
dollar, while the country’s benchmark Bovespa equities index
fell by more than 0.6 percent.
Mexico’s peso also
slipped by 0.83 percent against the dollar after Tuesday’s rise.
“With the change in the foreign environment, the view toward
risky assets has turned less favorable,” analysts at Sao Paulo
brokerage Guide Investimentos wrote in a note.
Among big losers in both currency and equity markets on
Wednesday was copper-dependent Chile, whose benchmark IPSA
equities index retreated nearly 0.
5 percent, while its
peso currency slipped by almost 1 percent.
The country was hit by falling copper prices, which
dropped over 3 percent, on trade concerns.
The biggest loser on the IPSA was shipping firm Compania Sud
Americana de Vapores SA, or CSAV, which fell 4.1
percent.
Its stock followed a fall in shares of Hapag Lloyd AG
, in which CSAV has a major stake, as traders took
profits following a Reuters report on Monday that CMA CGM SA of
France had made an exploratory approach to its German rival over
a potential merger.

Key Latin American stock indexes and currencies at 2200 GMT:

Stock indexes Latest Daily YTD pct
pct change
change
MSCI Emerging Markets 1,064.
72 -1.07 -8.
09

MSCI LatAm 2,547.41 -0.
39 -9.93
Brazil Bovespa 74,398.
55 -0.62 -2.
62
Mexico IPC 49,025.15 0.
07 -0.67
Chile IPSA 5,297.
48 -0.48 -4.
80
Chile IGPA 26,832.02 -0.
43 -4.14
Argentina MerVal 27,231.
78 -1.46 -9.
43
Colombia IGBC 12,311.47 -0.
75 8.27
Venezuela IBC 92,554.
58 -11.56 7,227.
34

Currencies Latest Daily YTD pct
pct change
change
Brazil real 3.8811 -2.
20 -14.63
Mexico peso 19.
09 -0.83 3.
19
Chile peso 653.0 -0.
95 -5.87
Colombia peso 2896 -0.
84 2.97
Peru sol 3.
279 -0.18 -1.
28
Argentina peso (interbank) 27.375 -0.
11 -32.05

Argentina peso (parallel) 28.
38 -0.25 -32.
24

(Reporting by Gram Slattery, Patricia Duarte and Miguel Angel
Gutierrez; Editing by Dan Grebler and James Dalgleish)
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